EU will screen foreign investment from April

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FILE PHOTO: A European Union flag is seen outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir

BRUSSELS (Reuters) - The European Union will start screening foreign direct investment into the 28-nation bloc from April to safeguard Europe’s security, public order and strategic interests, the European Commission said.

European ministers approved the process on Tuesday, first proposed by the Commission in 2017.

“With the new investment screening framework, we are now much better equipped to ensure that investments coming from countries outside the EU actually benefit our interests,” Commission President Jean-Claude Juncker said in a statement.

The screening aims to give EU countries a tool to intervene in cases of foreign direct investment in strategic assets, in particular if carried out by state-controlled or state-financed enterprises.

The move is a response to concern from some EU governments, notably France and Germany, over investment from China, giving Beijing access to key technologies through takeovers of European companies while at the same time protecting its own firms.

“We have seen a recent increase in investment in our strategic sectors and this has led to a healthy public debate on the issue. With this new framework we are in a much better position to monitor foreign investments and safeguard our interests,” Trade Commissioner Cecilia Malmstrom said.

The framework will create a cooperation mechanism where EU countries and the Commission will exchange information and raise concerns related to specific investments and allow the Commission to issue opinions when an investment poses a threat to the security or public order of more than one country.